Monday, 29 May, 2017

Iran, the next regional transport hub?

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By ordering dozens of long-distance Airbus and Boeing aircrafts, Iran is positioning itself as a potential long-term transit point between East and West, analysts say.

Iran’s signing last week of an deal for 109 Boeing Co. jetliners five months after agreeing to buy 118 from Airbus Group SE underscores the scale of the country’s ambitions to become a regional transport hub.

The purchase of almost 230 planes would create a fleet three-quarters the size of that at British Airways and larger than the current lineup at Abu Dhabi-based Etihad Airways, one of three Persian Gulf carriers that transformed air travel in the years Iran was stymied by trade sanctions linked to its nuclear program.

“Certainly this is our historical position: we have always been a center for communications in the region,” Iranian Transport Minister Abbas Akhoudi said in an interview.

Iran Air agreed in January to buy 118 jets worth $27 billion at list prices from Airbus.

Further, American company Boeing signed an agreement last week to sell jetliners (80 aircrafts valued at $17.6 billion) to Iran Air.

“There’s no doubt that they (Iranians) want to emulate carriers like Emirates and Etihad,” John Strickland, an airline analyst at JLS Consulting in London told to travel news portal Skift.

“People poured scorn on the ability of the Gulf carriers to fill their aircraft but they’ve done so. And Iran has had a bigger air market over the years that’s been put in a straitjacket by the international sanctions.”

Though Iran has long said the lifting of sanctions would spur significant plane orders to serve its 80 million population plus a diaspora of 5 million overseas, a possible fleet of 120 wide-bodies — more than currently operated by long-haul specialists such as Singapore Airlines Ltd. — smacks of wider objectives.

That could include building Tehran into a hub where people change planes on intercontinental journeys, emulating the model established by Emirates of Dubai and followed by Qatar Airways, Etihad and, further west, Turkish Airlines.

The Iranian capital shares similar geographical advantages, located at a crossroads between Europe, Asia, Africa and the Middle East, with most of the Americas also within range.

“Iran is certainly coming from behind,” Strickland said. “But it has the advantage of a large population that will support point-to-point traffic that the Persian Gulf carriers don’t have because of their small home catchments.”

“We used to be a very important airline in the region and globally, so of course we want to play our role fully once again,” Iran Air Chairman Farhad Parvaresh told Reuters in February.

Persian Gulf carriers dominate long-haul travel thanks to smart, efficient hubs and a strategic position that places two thirds of the world’s population within an optimal 4-8 hours’ flying time from Dubai, home to regional heavyweight Emirates.

The only serious regional competitor to Persian Gulf carriers for now is Turkish Airlines. But the variety of short- and long-haul jets acquired by Iran suggests it wants a share of the spoils in the future.

“(Iran Air’s) obvious intention is to become part of the network operation that the Persian Gulf carriers have operated so effectively,” said Peter Harbison, chairman of airline thinktank CAPA, which held an aviation meeting in Tehran last month.

“Iran is very well geographically positioned … We are obviously looking a few years out to get to that stage, but it is really where they need to be in 10 years time.”

The International Air Transport Association (IATA), a trade association, has predicted Iran’s market will more than treble from 12 million passengers a year now, mostly domestic flyers, to 44 million by 2034.

“While the airlines here (in Iran) are rebuilding their capacity, the regional carriers … are looking to suck traffic out over the Persian Gulf airports,” Dick Forsberg, strategy chief at aircraft lessor Avolon, said during the CAPA Iran Aviation Summit.

“It is going to be very hard for the airlines here to recover that leakage in the short- and perhaps even medium-term.”

Already 28 foreign carriers serve Iran and more are likely to arrive, says CAPA.

“We are not afraid of competition,” Parvaresh said. “We have good relations with most other carriers and there is no problem. I think Iranians for example will want to mainly fly with Iranair.”

Skift travel news portal and Reuters News Agency contributed to this report

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1 Comment

  1. Amir

    June 28, 2016 at 4:43 pm

    Viva “Hussein Hamoome” against the Jahel of the world. If you don’t understand what I mean, read my comment on ” US state department welcomes Boing deal with Iran”.

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